The top contenders to work with Netflix on creating an ad-supported tier for the streaming service are now NBCUniversal and Google, The Wall Street Journal reported Wednesday (June 22), citing unnamed sources.
Netflix wants to add the new tier to add more revenue through selling ads around its programming. The idea is still in its nascent stages as of this week.
The report said the NBCUniversal partnership, if it goes through, would be exclusive, with parent company Comcast’s video ad unit FreeWheel supplying tech to help out with making the ads and NBCUniversal’s ad sales team helping sell them. This would most likely involve revenue-sharing.
However, the report noted that one issue is whether Netflix would be guaranteed a certain amount of revenue.
Meanwhile, Google would have its own ad-serving tech and video experience through its YouTube connections. Google also already has a commercial relationship with Netflix, as Netflix buys its ad-buying tools. Per the report, Google is also likely to look for an exclusive arrangement.
Netflix, which had said in years past that it wouldn’t ever have ads, has seemed to be shifting into looking more charitably at the idea.
This has likely come as rival streaming services have been gaining ground, and as a pandemic-fueled surge in growth has added more pressure on the once all-powerful streaming service.
All of this comes as Netflix has seen other struggles in recent months, with the company cutting 150 jobs in March.
That decision was spurred by slower revenue growth, following a mass surge during the pandemic.
The lost positions primarily occurred in the U.S. and a lot of them came from both film and TV creative teams, according to unnamed sources — with several that had been executive ranks, including in original content.